IMF, WTO Argue for Open Trade, More Aid for Displaced Workers

Andrew Cummings
April 12, 2017

The world isn't doing enough to help workers and communities displaced by global free trade, says a new report.

According to one study cited by the report, trade with China resulted in the loss of a million United States manufacturing jobs and 1.4 million non-manufacturing jobs between 1999 and 2011.

To view the full article, register now.

But, drawing on recent research, they admit that those who lose out in global competition can be hit harder and suffer longer than previously understood.

"The good news is that after six years of disappointing growth, the world economy is gaining momentum as a cyclical recovery holds out the promise of more jobs, higher incomes and greater prosperity going forward", Lagarde said the speech to be delivered at Bruegel, an economic research institute in Brussels. The organizations want countries to make it easier for people to switch careers or move where jobs are and in some cases to provide insurance for lost wages.

International Monetary Fund in the outlook said emerging market and developing economies face starkly diverse cyclical positions and structural challenges, noting that enhancing financial resilience can reduce the vulnerability to a tightening of global financial conditions, sharp currency movements, and the risk of capital flow reversals.

She said if productivity had grown since 2008 as it had been before the financial crisis, economic output in advanced economies would be 5 percent higher today - the equivalent of adding a country with output larger than Germany to the global economy. Over the longer term, countries highly dependent on one or a few commodity products should work to diversify their export bases.

"But adjustment to trade can bring a human and economic downside that is frequently concentrated, sometimes harsh, and has too often become prolonged".

The prospects are better for advanced economies, where manufacturing activity is stronger, as well as for emerging and developing economies, which will contribute more than three quarters of global GDP growth this year, she said.

"So there is a positive short-term outlook on the horizon, which is unfortunately tainted by the risks that are still there, and that lead us to be concerned about the risk of complacency", Lagarde added.

Also in March, the US Federal Reserve's policy-setting Federal Open Market Committee (FOMC) raised the US benchmark interest rate by 25 basis points to a range of 0.75 percent to 1 percent.

Other reports by iNewsToday